In a first for a European firm, Gerling-Konzern Globale Rückversicherungs (GKG) has deferred interest on €220m of subordinated notes. The German reinsurer is instead prioritising its policyholder obligations. In response to the coupon deferral, S&P downgraded the bonds from C to D on August 18, two days after the coupon’s due date.
The decision to defer payment comes at the same time as parent company Gerling Group is trying to complete the sale of the GKG unit. Angry bondholders co